Monday, August 20, 2012

Social Media and Conversions

I wanted to get your take on some data from a study released this month by the firm Monetate, which found that email and search are far more likely than social media to lead to conversions or sales (conversion rates were 4.25% for email, 2.49% for search, and 0.59% for social media).
At this point, the sweet spot of social media lies in lead generation. That is, Facebook and Twitter excel at identifying prospects (the top of the so-called sales funnel), rather than converting them to clients. This corresponds with my both experience and expectations, in that the privacy and flexibility of email allows parties to negotiate details and ask questions that a Facebook message or tweet aren’t equipped for.

(To be sure, not all social media are created equal. Consider LinkedIn, where messages I receive on the social network also come through in my email inbox. And when I reply, I reply to a person’s email address, not their LinkedIn account.)

The reason for this dichotomy: email and search predate social media. Long before anyone knew what a “tweet” was, we were firing off emails on CompuServe, Prodigy, and AOL, and scouring AltaVista, Google, and Yahoo! These were the net’s original apps. Then came chat rooms and instant messaging (if I have my history correct).

As such, we’re more familiar and trusting of the former than the latter. And for good reason: social media is forever in flux—introducing a new interface here, tweaking a privacy policy there, adding more features here. In contrast, the changes behind email and search typically take place under the hood, which presents the appearance of continuity and stability. The visible structure of email and search—for the former, fields for recipients, a subject, and the body; for the latter, an input box, followed by 10 results—hasn’t changed much in the decade I’ve been using it.

This will change, of course, especially as Wall Street captures their attention. (Again, LinkedIn, one of whose core competencies is to facilitate deal making, is the exception.) By contrast, Google’s search engine was minting money long before the company went public.

The lesson here underscores the importance of integrated marketing. Smart companies use Facebook to establish their brand, they use Google to corroborate their credibility, and then they close the deal via email. As always, email remains the killer app.

Social media isn’t the place for hard sells. (Save those for fundraising solicitations from politicians.) Social media is a world of soft sells and long tails, where competition is transparent and every customer must be wined and Klouted.